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Mortgage rates are at record lows, this is the time to refinance or buy a new home so there is no time like the presence to see if you qualify for refinancing or a purchase loan?

Mortgage Lenders now have tighter loan qualification restrictions and your credit score, FICO, is how they determine if you qualify for a loan and at what interest rate will be based on your score. Credit scores are determined by a software algorithm that analyzes your credit and payment history.

FICO scores run between 300 and 850, with the highest numbers considered to be the best scores. The 47% of Americans with credit scores of 720 or higher receive the best interest rates.

Tips to Improve your Credit Score

FICO scores are based on your credit history. Each credit reporting bureau, Experian, TransUnion, and Equifax calculates its own score, so you may have three scores.

The first thing you need to do is review your credit reports for errors freeannualcreditreport.com to get copies. $14.95 is the charge to see your entire credit report so once you get the reports, scan then very carefully for errors.

Pay down any maxed out credit cards but do not pay off in full as this will make your FICO go down.

'Do Not' close credit card accounts. FICO scores utilize a credit utilization ratio that turns against you because it appears that you might be overusing your available credit.

Don't max out or consolidate credit cards. Credit card companies like it if you only use about 30% of your available credit on your card. You're better off having small balances on multiple cards than a large balance on one card.

Don't apply for new revolving credit or transfer balances. If you're buying a new home, it's tempting to buy some new furniture, but don't open that account until after your loan closes. You don't want "inquiries" to be raised in the scoring algorithm.

Don't change jobs right before you apply for a home loan, although job changes within the same field are considered more favorably in scoring.

Do pay all bills on time and with at least the minimum payment due. Lenders like on time payment histories.

Do pay down your debt, as lower income-to-debt ratios are attractive to lenders. Start by reducing credit card balances first, beginning with the balances that generate the highest interest rates. Revolving credit is considered riskier debt than installment loans such as student loans or car payments.

Do shop lenders simultaneously. Credit score software takes into account several inquiries from mortgage lenders as normal, but if you space rate-shopping out over weeks or months, that could impact your credit score negatively.

Remember, mortgage lenders are most interested in your ability to repay their loan. The most important factors are job and debt payment history. Job security -- long-term employment in the same field and on-time